What is PayPal Dollar and how to buy PYUSD in USA?
PayPal USD (PYUSD) explained.
PayPal has launched its own stablecoin, PayPal USD (PYUSD), with the aim of simplifying digital payments, especially in the blockchain ecosystem.
PYUSD is currently available to eligible PayPal customers in the United States and provides a seamless way to exchange between Stablecoin and US Dollars directly within the PayPal platform.
Designed for users seeking stability, PYUSD is pegged to the US dollar and fully backed by USD deposits, short-term US Treasurys and similar currencies. This ensures that the price of PYUSD is in line with the US dollar, despite fluctuations in the cryptocurrency market or an unexpected event that causes the stable coin to depreciate from its associated fiat currency.
Users can buy, sell and transfer PYUSD stablecoin through the PayPal app or website. Additionally, PYUSD can be used to support merchants for online purchases, sent to compatible cryptocurrency wallets, or converted to other PayPal-supported cryptocurrencies such as Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Litecoin (LTC). .
PYUSD does not charge PayPal for transfers between users; However, there are fees associated with converting between PYUSD and other cryptocurrencies, as well as online purchases and funds. These fees are clearly disclosed to users during transactions.
Who is the issuer of PYUSD stablecoin?
PayPal USD is issued and managed by Paxos Trust Company.
Paxos Trust Company is a regulated blockchain infrastructure company regulated by the New York State Department of Financial Services (NYDFS), which means PayPal USD is a regulated product.
Paxos previously issued Binance USD (BUSD) but halted after pressure from the US Securities and Exchange Commission and NYDFS suggested the stablecoin was an unregistered security.
In June 2022, PayPal was granted a BitLicense by the NYDFS. A BitLicense is a license that allows businesses to engage in cryptocurrency-related activities in New York State. PayPal's BitLicense allows the company to provide cryptographic services to customers in New York State.
Paxos Trust Company, which issues PYUSD on behalf of PayPal, publishes monthly reserve reports detailing the composition of PYUSD reserves. Paxos also provides third-party verifications of the value of PYUSD's reserve assets conducted by an independent accounting firm in compliance with the standards set forth by the American Institute of Certified Public Accountants. This ensures transparency and trust in the support of a stable coin.
Which blockchains support the PayPal PYUSD stablecoin?
PYUSD was initially launched as an ERC-20 token on the Ethereum blockchain. This means that it is available to a growing community of external developers and will be supported by many Web3 applications in the future, especially those built on the Ethereum blockchain.
In the year On May 29, 2024, PayPal announced that its stablecoin PYUSD will be available on the Solana blockchain. This move aims to make PYUSD transactions faster and cheaper, giving users flexibility and control using a choice of multiple blockchains.
Solana's speed and scalability make it the ideal platform for PYUSD to transform businesses by providing an efficient payment method. The partnership with PayPal furthers Solana's goal of driving fintech innovation.
Users can easily manage PYUSD in PayPal or Venmo Wallet, and when transferring to external wallets, they have the choice of using Ethereum or Solana blockchains.
Crypto.com, Phantom and Paxos are early adopters of PYUSD on the Solana blockchain, making it easy for users to buy PYUSD with traditional (fiat) currency, providing a streamlined experience for both individual consumers and businesses.
USDT vs USDC from PYUSD: Key Differences
Tether (USDT), USD Coin (USDC) and PYUSD are all stablecoins pegged to the US dollar, meaning they aim to maintain a 1:1 value ratio with the USD.
However, they vary by issuer, transparency, regulatory oversight and blockchain availability. USDT was issued by Tether and is the oldest and most widely accepted stablecoin, but it has faced scrutiny over its reserves.
USDC, issued by Circle, is known for its transparent and regulated system. PYUSD, the new stablecoin, is issued by Paxos on behalf of PayPal and emphasizes transparency and consumer protection.
While USDT and USDC have large market capitalizations of billions, PayPal's dollar is poised to rapidly expand its capitalization of its massive user base.
How to buy PayPal dollars (PYUSD) in the United States
There are many ways to buy PayPal Dollars (PYUSD) in the United States, including through PayPal, crypto exchanges or other wallets and platforms.
Directly through PayPal
Eligible PayPal users can purchase PYUSD through their existing PayPal account using their balance or linked bank account or debit card. This feature is accessible through the PayPal app or website.
Cryptocurrency exchanges
Alternatively, cryptocurrency exchanges such as Coinbase and Kraken list PYUSD allowing users to purchase via a variety of payment methods such as bank transfers, debit or credit cards, or other cryptocurrencies.
Other wallets and platforms
As PYUSD gains traction, it has reached other platforms such as Crypto.com and Phantom, which may offer additional ways to earn it, such as peer-to-peer (P2P) trading or using other cryptocurrencies.
Steps to buy PYUSD on Coinbase and Kraken in the United States
To buy PYUSD in the US, create an account on Coinbase or Kraken, connect your payment method, find PYUSD, enter the amount, and review and confirm your purchase.
Buying PYUSD on Coinbase in the United States
Create a Coinbase account: If you don't have one, sign up for a Coinbase account and complete the required verification process. Link a payment method: Link your bank account, debit card, or wire transfer to your Coinbase account. Search for PYUSD: Type “PYUSD” in Coinbase's search bar and select it from the results Enter Buy Amount: Enter the amount of PYUSD you want to buy in USD or the same amount you want to buy in your local currency. Review and Check: Review your purchase details. Including amount, fees and total cost. Confirm the purchase to complete the transaction. Store PYUSD: Once the purchase is completed, your PYUSD will be available in your Coinbase wallet. You can choose to keep it there or transfer it to an external wallet.
Buying PYUSD in the United States with Kraken
Create a Kraken Account: Register for a Kraken account and complete the required identity verification process. Deposit: Deposit dollars or other supported currencies into your Kraken account using bank transfer, debit or credit card, or other available methods. Go to PYUSD Trading Pair: In the Kraken interface, find a PYUSD/USD or PYUSD/EUR trading pair. Place a buy order: Enter the amount of PYUSD you want to buy and set the price you want. You can choose between market orders (executed at the current market price) or limit orders (executed when the price reaches your specified level). Review and Confirm: Review your order details and confirm the purchase. Receive PYUSD: Receive your order once. Once completed, your PYUSD will be credited to your Kraken account. You can store it there or withdraw it to an external wallet.
After buying PYUSD on Coinbase or Kraken, users can store it in their exchange account wallet. But for enhanced security, you can transfer PYUSD to a self-sustaining wallet that supports the Etherm or Solana blockchains, depending on which network you bought it from. This allows users to fully control their private keys and assets, reducing the risk of tampering or restrictions.
Is PayPal USD (PYUSD) a good investment?
PYUSD is not a traditional investment like stocks or other cryptocurrencies where price appreciation is expected.
PYUSD's primary function is to maintain a stable value pegged to the US dollar. With stability, it could be a smart choice to hold wealth in the cryptocurrency realm or to enable easy transactions in the PayPal ecosystem and possibly other platforms as usage grows.
Additionally, holding PYUSD can diversify your crypto portfolio and reduce overall volatility. However, PYUSD is not suitable for investors who want to earn significant income. Even with Paxos' transparency efforts, potential investors should be aware of the growing regulatory landscape surrounding the stablecoin and concerns about centralization.
The choice to adopt PYUSD ultimately comes down to personal risk tolerance and financial objectives. If stability and the possibility of wide acceptance in payments are your main concerns, PYUSD may be worth considering. However, if the goal is higher returns, exploring other investment options may be more appropriate.
